Indian tech sector growth set to halve this fiscal: Nasscom

India's technology sector anticipates a decelerated growth trajectory this fiscal year, with clients exercising caution in spending and deferring decision-making, country's primary industry body Nasscom has said.

The National Association of Software and Service Companies on Friday forecast a modest revenue expansion of 3.8 per cent, amounting to $253.9 billion, in contrast to the previous fiscal's robust 8.4 per cent growth, reported Reuters.

According to Nasscom, growth this year is anticipated to stem from a range of sectors, with expected contributions falling within the lower to mid-single digits. These segments encompass information technology, business process management, software products, and engineering research and development.

Software exports, including services and product sales to clients, fell by 3.3 per cent to $199 billion, contrasting with an 11.4 per cent growth in the preceding year.

Despite the cut, the sector is projected to net an addition of 60,000 jobs, marking a nearly 80 per cent decrease from the previous year's addition of 290,000 jobs.

The industry's overall headcount rose to 5.43 million from 5.37 million a year earlier. The industry body did not reveal the geographical or industry-specific breakdown of the revenue.

"The current fiscal was characterized by a plethora of uncertainties and sluggish decision-making," remarked Sangeetha Gupta, senior vice president at Nasscom.

"So if a project that should have begun in a quarter was postponed by six months, you're witnessing the impact on revenue growth," Gupta explained, noting a "correction in spending" following the COVID-related surge.

The pandemic spurred clients to ramp up their digital investments, particularly in sectors like retail, banking, and financial services amid movement restrictions.

The uptick in investments began waning at the onset of this fiscal year due to global macroeconomic uncertainties.

"There is some 'reversal' of sentiments in 2024 as US recession fears are weakening," stated Nasscom President Debjani Ghosh.